Third Platform enters next chapter: IDC

In this era of digital transformation, companies will compete on platforms and ecosystems built on cloud, artificial intelligence, blockchain and hyper agile app development, according to the research firm — but the key to success is partnership.

There was some lighthearted booing when Frank Gens started his keynote at the recent IDC Directions event in Toronto.

It was hockey, not high-tech analysis, that riled the crowd. The night before, the hometown Maple Leafs had been ousted from the National Hockey League playoffs by the Boston Bruins. Gens, chief IDC analyst, couldn’t resist rubbing it in by saying he’d “just flown in from Boston,” where IDC is based.

Once the friendly jeering died down, Gens went on to talk (albeit more seriously) about how another game — enterprise IT — is changing. While some players will emerge as winners, he warned, others are already in danger of being left behind.

Third Platform 1.0

First, a little background. About 11 years ago, IDC collectively dubbed mobile, big data, cloud and social the Third Platform. Together, said IDC, these are the foundational technologies required for digital transformation (DX).

“The Third Platform is where developers congregate and build new things to create new value,” Gens reminded the event audience.

IDC says about two-thirds of all enterprise IT spending (an estimated $1.3 trillion in 2018) is now devoted to Third Platform technologies, with that amount likely rising to $2.1 trillion by 2021.

Gens noted Hadoop, Facebook, Salesforce and Apple’s iPhone were all born circa 2007, during the “first chapter” of the Third Platform era.

“That was the chapter of experimentation, of companies [asking] what can we do with all these technologies?” Gens said.

Although an incredible amount of growth and profitability sprang out of that period, Gens said organizations that harnessed its power were still taking a traditional approach to innovation, one that pitted company against company.

“It was isolated and siloed, not really a connected model of innovation,” he said. But as the Third Platform enters Chapter Two, he said that traditional model just won’t cut it anymore.

Third Platform 2.0

That brings us to today, and to the second chapter of the Third Platform. As Gens explained, in this new era, companies compete based on platforms and ecosystems. These platforms and ecosystems are being built upon four key technologies: cloud, artificial intelligence, blockchain and hyper agile app development.

“Over the next four to five years, developers using these technologies will be able to develop and deploy as many applications and services as [there] have been over the past 40 years,” he predicted.

Here’s how Gens sees this second chapter playing out:

Cloud: “The foundation of DX is cloud and it will continue to be,” said Gens. “We’ll see cloud 2.0 everywhere and for everything.” That includes more cloud, bigger cloud, more specialized cloud (for quantum computing and Internet of Things) and edge computing cloud. Multi-cloud is also growing; by 2021, IDC predicts more than 90 per cent of enterprises will be using more than one cloud provider.

AI: “By 2021, 75 per cent of commercial enterprise apps will use AI. So many apps will have AI baked in,” said Gens.

Hyper Agile App Development: Within the next three years, IDC expects about 80 per cent of app development on cloud platforms to involve one or more technologies such as APIs, microservices architecture, containers or Functions-as-a-Service. These will allow enterprises to connect to millions of developers and code sources for their own innovation purposes.

Blockchain: Driven by the need and demand for trust, 25 per cent of the top global banks and nearly 30 per cent of all manufacturers and retailers will use blockchain networks in their production by 2020, according to IDC’s projections.

With the Third Platform’s second chapter already underway, Gens posed a question: “What does enterprise IT need to look like to actually plug into this innovation chapter?”

The new IT org

The answer, said Gens, is that “we’ll see a reinvention of what enterprise IT looks like.”

In short, the old siloed approach of the Third Platform’s first chapter has to go. Instead, enterprises must tap into external resources and actively make connections to keep up with the lightning speed of innovation. That means adopting an agile DevOps culture that uses API-based distribution networks, third-party data and third-party code.

How will the ‘new’ IT organization make these connections and find these resources? In many cases, through vendors operating within four major platform streams: cloud management/integration; apps/APIs; industry (in sectors like automotive, healthcare, etc.) and mega-platform (think of multi-category vendors).

As Gens characterized this new IT landscape, “it’s the idea that no one digitally innovates alone.”

Like playoff hockey, enterprise IT is becoming much more of a team sport. In chapter two of the Third Platform, the key to winning lies in picking your teammates very, very strategically.